Resources Connection, Inc. Reports First Quarter 2011 Results

Resources Connection, Inc. RECN today announced financial results for its fiscal first quarter ended August 28, 2010. Total revenue for the first quarter of fiscal 2011 was $123.7 million, up 4.6% on a quarter-over-quarter basis, though down 7.6% on a sequential quarter basis as anticipated due to the summer holiday season. Revenues in the U.S. were up 8.5% quarter-over-quarter but down 7.6% sequentially. International revenues declined 6.9% quarter-over-quarter and 7.8% sequentially (3.3% quarter-over-quarter and 5.6% sequentially on a constant dollar basis, respectively). Gross margin was 39.8% in the first quarter of fiscal 2011, up 160 basis points from 38.2% in the comparable period of fiscal 2010 and, as expected, down 160 basis points from the fourth quarter of fiscal 2010. The decrease from the fourth quarter is attributable to two paid holidays during the first quarter and the lower revenue base impacting leverage of certain fixed benefit costs. Selling, general and administrative expenses for the first quarter of fiscal 2011 were $40.9 million, down $2.1 million from the fourth quarter of fiscal 2010 amount of $43.0 million. Cash flow from operations and adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, stock based compensation and contingent consideration expense) were $7.1 million and $11.1 million, respectively, for the first quarter of fiscal 2011, compared to cash used in operations of $10.6 million and adjusted EBITDA of ($603,000) for the first quarter of fiscal 2010.